The price range can be huge depending on where you live.
The average cost of a private room in a nursing home is now $203 per day (almost $75,000 per year) throughout the United States, according to the MetLife Mature Market Institute, but the price varies enormously from city to city. The average daily cost is just $135 in Birmingham, Alabama, and up to $348 in Stamford, Connecticut. That adds up to a big difference over just one year - totaling nearly $50,000 in Birmingham or more than $125,000 in Stamford (see Figure 6.1).
The price can also vary a lot within one city. There are high-quality and lower-quality nursing homes everywhere, which can have a big difference in price. It might feel strange, but it’s a good idea to contact a nursing home or two where you wouldn’t mind living someday just to get an idea of how much a high-quality nursing home costs in your area.
You may want to boost your benefit amount even higher if you’re interested in receiving care in your home, which most people are. The average hourly rate for a home health aide is $19, according to the MetLife Mature Market Institute. Even if you don’t require 24-hour care, the cost can easily top the price tag for a nursing home. In fact, quite a few people in nursing homes may have preferred to get care in their homes, but couldn’t afford the extra cost.
All good long-term care policies now provide at least as much coverage for home care as they do for nursing-home care. If you have an old policy, however, you may want to upgrade it to a newer version. Many policies purchased in the mid-1990s only covered home care at 50 percent of the rate of nursing-home care, which could leave you with too little money to choose that option. If your home-care coverage isn’t enough, contact your LTC insurance company and find out how much it would cost to upgrade to a newer version. If you stay with your current company, the added cost will probably be a lot less than it would with another insurer.
